US Government Shutdown: Treating Regulatory Lapses as Predictable Operational Risks

In this part 2 of a 2-part video interview on the impacts of a US government shutdown—set to occur January 30, 2026 if remaining bills are not passed by lawmakers—on pharmaceutical manufacturing and development, Megha Sinha, CEO, Kamet Consulting Group, outlines a strategic framework for pharma manufacturers to navigate the operational risks and uncertainties associated with FDA shutdowns. Sinha emphasizes that while manufacturers cannot control a government shutdown, they can mitigate its impact by treating it as a predictable operational risk rather than an unpredictable crisis.

Watch Part 1 of this interview on how a government shutdown causes FDA inspection bottlenecks and backlogs!

What Are the Vulnerabilities?

Sinha identifies that the most vulnerable stages during a shutdown are those dependent on new starts and scheduling capacity. This includes new fee-bearing submissions, with the FDA likely unable to accept new fees during a lapse, as well as any milestones dependent on physical inspections, such as pre-approval inspections or major manufacturing site changes.

While critical health and safety functions often continue using carryover user fee funding, the resulting system becomes less predictable. Sinha highlights a critical takeaway for the industry: "The big lesson from recent funding lapses is that the uncertainty cost is often higher than the shutdown itself."

What Are the Four Pillars of Resilience?

To maintain stability, Sinha recommends four specific planning actions:

• Protect Milestones: Pull forward any fee-triggering filings that can be reasonably completed before a high-risk window.

• Early Inspection Readiness: Close out critical CAPAs and ensure data integrity early so the company can take advantage of the first available inspection slots once operations resume.

• Two-Scenario Planning: Create a "base case" versus a "shutdown case" timeline for all milestones to prevent supply chain whiplash from late changes.

• Operational Buffers: Build inventory for high-critical products and diversify the supply chain so the US does not become a single point of failure.

What Is the Outlook?

As the industry looks toward 2026, Sinha advises companies to develop formal shutdown playbooks with clear decision rights. While digital submissions and mature quality systems have made the industry more prepared than it was a decade ago, the throughput of physical inspections remains a primary exposure point. Sinha concludes that success depends on proactive management: "The winners are really the team that will treat this like any other operational risk: Plan early, protect the milestones, and communicate clearly."

Transcript

Editor's note: This transcript is a lightly edited rendering of the original audio/video content. It may contain errors, informal language, or omissions as spoken in the original recording.

So, you hedge like it's weather, right? We can't control the shutdown. But you can really plan around it. I would really do four things to plan around it.

So, one is protect your milestones. So, if companies are able to pull forward any fee-triggering filings or actions, that can be reasonably completed before the high-risk window, do that, because if FDA can't accept fee-bearing submissions during the lapse, that's a hard stop.

To go inspection-ready earlier than it feels comfortable. So, close out critical CAPAs, lock your validation evidence, ensure data integrity, so if inspections restart with limited slots, manufacturers are able to take advantage of that first available window.

Third, really build a two-scenario plan. I really like a simple base case versus a shutdown case timeline for any submission acceptance, inspections, and approval milestones so your supply chain isn't really whiplashed by late changes.

And then, you know, create operational buffers, that's the fourth one. Where you can build inventory buffers for high-critical products. I think a lot of manufacturers have already done this, but really derisking sole source constraint and really sequencing global work that US doesn't become a single point of failure. Really, the point is not to overreact, but it's to really avoid being forced into heroics, because we didn't plan for a predictable risk.

Yeah, so most vulnerable stages are really the ones that depend on new start and scheduling capacity. So most vulnerable are the new fee-bearing submissions that need to be accepted and the clock has to start because FDA has signaled that it may be unable to accept new fees during a lapse. Anything that is inspection-dependent, so again, pre-approval inspections, major manufacturing site changes, and some high-impact supplements, because inspection slots are a throughput bottleneck, even in normal times. So, that will absolutely be impacted. And then administrative, so, meeting scheduling, follow-ups, and coordinated cross-center communication. So, these are really the most vulnerable.

And the least impacted will be the critical health and safety functions. That will continue to be supported by the carryover user fee funding. So, certain reviews can continue for at least a period of time even if the broader government operation is constrained. So, it is not really a universal slowdown, it's going to be targeted.

And the agency's really going to focus its effort on the high-critical items. So, the big lesson from recent funding lapses is that the uncertainty cost is often higher than the shutdown itself. We have seen that FDA can continue to position and process a portion of it's work using the carryover user fee funding, but the system becomes less predictable.

So, can they accept new fee-bearing submissions or not? What's the pace of the routine operations? And the result is really this backlog after reopening, and companies lose time, not only during the lapse, but also the revamp.

So, for 2026, companies should be doing three things. So, having the shutdown playbooks, with clear triggers, decision rights, and two scenario timelines. So what's the base case versus if there is a shutdown that happens? How are you going to plan around it?

Earlier inspection readiness: really having that single source of truth documentation so that they can move fast when the capacity actually returns with the agency. And your supply and portfolio product prioritization, so really deciding upfront which products and changes get resources if the timelines actually compresses.

How prepared is the industry? I think better than a decade ago, because we have digital submissions, we have stronger quality systems, and really more a mature scenario planning cadence within manufacturers.

But, we're still exposed to where dependency is physical inspections and the agency throughput. So, the winners are really the team that will treat this like any other operational risk: Plan early, protect the milestones, and communicate clearly.